WASHINGTON – U.S. Senate Committee on Small Business & Entrepreneurship Chair Ben Cardin (D-Md.) and U.S. Senator Cory Booker (D-N.J.), a senior member of the Small Business Committee, today sent a letter to U.S. Small Business Administration (SBA) Administrator Isabella Casillas Guzman urging the SBA to make its core loan programs and entrepreneurial development services more accessible to entrepreneurs impacted by the criminal justice system.
The letter follows a hearing Cardin convened last month to examine how the federal government can harness the power of entrepreneurship to help returning citizens and those impacted by the justice system successfully reenter their communities.
“Entrepreneurship can serve as a means of stable employment and, in many cases, is a necessity for many justice impacted individuals as they may be denied hundreds of times by the traditional labor market,” the Senators wrote. “…Given the critical importance of entrepreneurship for justice impacted individuals and returning citizens, it is important that we ensure they have access to SBA programs. Opening up these programs aligns with the SBA’s mission to ‘aid, counsel, and assist’ small businesses, and aligns with the agency’s long-standing focus on reaching underserved entrepreneurs.”
Specifically, the Senators asked Administrator Guzman to:
- open up the 7(a) and 504 Loan Programs to those with a criminal record similar to recent changes in the Community Advantage program;
- evaluate the impact of “good character” criterion for participation in SBA lending and contracting programs on justice impacted entrepreneurs; and
- direct the Office of Entrepreneurial Development to create specific programming for justice impacted entrepreneurs to be available in each state.
Under President Joe Biden, the SBA has already taken steps to support entrepreneurs who have been impacted by the criminal justice system. In addition to announcing a 2 year extension of the Community Advantage loan program on March 31, the administration removed restrictions that prevented entrepreneurs with a criminal history from accessing the program.
The Senators continued, “…the Community Advantage Program is just one of the many lending programs the SBA has to offer. We urge the SBA to open their traditional 7(a) and 504 loan programs to this group of underserved small business owners, by removing current restrictions, and working with lenders to make clear that questions regarding a small business owner’s criminal history are not required.”
The United States prison population has increased by more than 450% during the last fifty years, leading to 2 million individuals currently incarcerated in our federal and local prisons. As a result of the increased incarceration, more than 600,000 people are released from prisons annually; two-thirds of them recidivate within 3 years; and more than 70 million Americans—nearly 1 in 3 adults—have a history of involvement with the criminal justice system.
The job prospects of this significant portion of the U.S. working age population are hindered by their involvement with the criminal justice system, with studies showing that they are 50 percent less likely to receive a callback or a job offer after an interview. There is a general consensus among researchers that well-paying jobs significantly reduce recidivism among Americans impacted by the criminal justice system.
Senators Cardin and Booker have a history of working together to eliminate barriers to the SBA’s programs for entrepreneurs with a criminal record. After the Trump administration initially blocked individuals with a criminal record from receiving Paycheck Protection Program (PPP) loans in April 2020, Cardin and Booker introduced the bipartisan Paycheck Protection Program Second Chance Act to allow small business owners with criminal records to apply for PPP loans. Click here to download a PDF of the letter.
